"Every case is unique, but I do think there is room in Ontario for more trials and opportunities to get better deals for shareholders," says Spencer, from his office at Milberg LLP in New York.
Spencer has been watching the development of securities class-action suits in Canada since Ontario enacted Bill 198 in 2002 to provide more protection for investors after the Enron fraud rocked the capital markets. "Bill 198 shows that Ontario, and other parts of Canada for that matter, is serious about protecting shareholders' rights through class actions," says Spencer.
NERA economic consulting, which tracks litigation and outcomes, reported in January 2011 that there were a record 28 outstanding securities class actions in Canada. Although the claims are in the billions, class members are more likely to recoveries in the millions. In 2010, the average class received between $10 and $13 million in compensation.
Spencer is more accustomed to thinking in millions or, as in the Vivendi case, billions.
Larger recoveries will come from developing cases better, says Spencer, and "We will be willing to go to trial if defendants do not settle at an appropriate level."
Spencer will continue with Milberg LLP in New York, but works closely with Toronto's Kim Orr. "He's a very urbane, smart guy, and people who have dealt with him on other cases, say he is a lawyer's lawyer, which is high praise," says Orr. "He is supremely prepared and very intelligent. He would be a formidable opponent and I am glad he is not going to be my opponent."
Compared to the US, Canadian securities class-action suits are still in their infancy. Only one class action, against Danier Leather, has ever gone to trial. After a nine-year battle, the Supreme Court ruled in favor of the defendants and ordered the plaintiff to pay Danier's estimated $1 million legal bill.
"In the US, which has a population of 10 times Canada, only 5 or 6 securities class actions have gone to trial in the last decade," says Spencer. "So the experience is probably similar in the US and Canada; it is just that the results in Canada have been lower settlements. I hope that in appropriate cases we can improve that for plaintiffs."
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"We have lots of capable lawyers in this country," says Orr. "But this area of the law in Canada is relatively young. Spencer's done the kind of trial in the US that I don't think anyone here has done in terms of size and complexity. He has been doing this a long time and he has a level of experience and wisdom that gives him a better understanding of the probabilities and what is likely to happen."
In addition, Spencer's firm, Milberg LLP, has staying power and deep pockets that can sustain long, complex securities litigation.
"I don't know if it is going to immediately change corporate behaviour in Canada," says Orr. "But I do think you are not going to see cases get settled for minimum payments, at least not with him or us."